Shaping the Market Offerings

Prof. Suvendu Kr. Pratihari 11

Shaping the Market Offerings

Prof. Suvendu [email protected]

LESSON PLAN

Session-3: Concept of Product Difference between

products and services Levels of product –

Customer value hierarchy

Classification of products

Session-4: Product

Differentiation Building and

Managing product mix and product lines

Product and Brand Relationship

Session-5: Packaging, labeling,

Warranties and Guarantees.


Session-3: Shaping the Market Offerings

Product characteristics and classificationsDifference between goods and servicesProduct Levels: The Customer Value Hierarchy


What is a Product?

It is a need Satisfying entity. More than a physical object. It is a complex cluster of value

satisfaction i.e. it is the total package of benefits the customer receives when he buy and use it.


Product Levels

Core Product

Basic Product

Expected Product

Augmented Product

Potential Product


Core Product: It is the unbranded and undifferentiated commodity like rice, flour or cloth. Here the product doesn’t have any identity as it is not linked with any owner or maker.

Basic Product: When the product gets an identity through a name, it is called Branded Product. E.g. Annapurna Atta, Tata Salt etc.

Expected Product: These products enjoy further distinctions from other similar products/brands with special attributes or qualities and claim uniqueness for its offer. Example- Maggie for its two minutes preparation, Dettol for its “Total protection against germs”, Tata Nano Car for its Small Car, Nokia Handset for its Battery Life etc.

The Customized Product: A product that is adopted to the requirement of the individual customer, Example – IT and Telecom Products, Industrial Products etc.


Augmented Product: It is the result of voluntary improvement brought by the manufacturer in order to enhance the value of the product by adding extra features or functions. Here the firm goes beyond the expectation of the customer/consumer. Example- Bluetooth technology inside the car for easy telephonic conversation as well as accessing songs from your handset. Internet TV was a kind of augmented product before few

years and now it is a successful product. Potential Product: It is the “Product of

Tomorrow”, carrying all the improvement and fineness that is possible under the given technological, economic and competitive conditions. Example-Electric Car, Solar Car, Car which can fly, Robot for domestic Use.


Classification of Goods

Classification of Goods on the basis of Durability Durable Goods: Example – TV set, Car etc. Non-Durable : Example – Tooth Paste, Cold

Drinks etc. Business Goods

Raw Material Exp – Iron Ore, Crude Oil etc. Fabricating materials and Parts Exp – Paints,

Gas Cylinders etc. Installations Exp – Heavy Machinery for

production facilities Accessory Equipments Exp – Not-Bolts, Car

Tires and Wheels etc. Operating Supplies Exp – Safety Gloves,

Measurement instruments etc.


Classification of Consumer goods, Ref: Panda-p-30

Convenience Goods Staple Goods: Consumer purchase on regular basis. E.g.

Tooth paste, Soap etc. Impulse Goods: Consumer purchase without any

planning. E.g. Magazine, Chocolate etc. Emergency Goods: Consumer purchase on an urgent

need. E.g. Umbrella, Antiseptic Cream etc. Shopping Goods:

It is a tangible product for which a consumer wants to compare quality, price and perhaps style in several stores before making a purchase is considered as a shopping goods

Example: Fashionable apparel, Furniture, Automobiles etc.

With shopping goods, buying habits affects the distribution and promotion strategies of both manufacture and middle man.Prof. Suvendu Kr. Pratihari 9

Specialty Goods: Goods with unique characteristics or brand identification for which the buyer need to make a special purchasing effort. Exp- TV, Music System, Mobile Set, Wrist Watch etc.

Unsought Goods: Goods the consumer does not know about or does not normally think of buying. Exp – Health Insurance Products, Fire alarm etc.


LESSON PLAN

Session-3: Concept of Product Difference between

products and services Levels of product –

Customer value hierarchy

Classification of products

Session-4: Product

Differentiation Building and

Managing product mix and product lines

Session-5: Product and Brand

Relationship Packaging, labeling,

Warranties and Guarantees.


Session-4: Shaping the Market Offerings

How companies can differentiate products?How a company can build and manage its product mix and product line?


Product Differentiation

Tangible Product Attributes Ingredient

/formula Functional

Features Additional

Features Packaging Design / Styling Product Quality /

Technology Durability Reparability

Intangible Product Differentiation Customer Care /

Service Delivery Customer Training Customer

Consulting Prestige / Status


Product Mix Elements @ HUL

Product Line-1

Product Line-2

Product Line-3

Product Line-4

Bathing Shop

Laundry Products

Beverage X

DoveLuxPearsLirilRexonaLifebouyBreezMotiHamamJai

SurfRinSunlightWheel501

LiptonBrookebondTaj MahalBruSuper Dust

XXXXXXXXX


Product Mix and Product Line

Product Mix: It denotes the complete set of all products offered for sale by a company. The product mix compose of several product lines.

Product Lines: A group of closely related products constitute a product line.

Width of Product Mix: It is the total number of product lines exist in a product mix

Length of Product Line: It is the total numbers of items/brands present in a product line.

Depth of Product Line: It denotes the total no of items under each brand in the line, in terms of variant, models, size etc.


Product Line Decision


Present Product

New Product

Present Product

New Product

Present Product

New Product

New Product

Quality

Pri

ce

Quality

Pri

ce

Quality

Pri

ce

Product Management and task involved Product management means managing the

product lines and product mix of the company Tasks for Product Management

How many different product lines should the firm accommodate?

How can the different lines be grouped for effective management?

What should be the relationship among the various members in the same product line?

How to position these products in the market? How do they distinguish themselves from other competing products/brands?

Should there be individual brand or family brand? How to develop a brand equity? How to plan a new product so that in the long run the

firm retains a healthy product portfolio. How to handle the products going through different

stages of their life cycle? What are the strategic treatment they require?


Packaging and Labeling


Function of Packaging and Labeling

Physical protection of goods Information Transmission Security Convenience


Components of Packaging

Package Material Package Aesthetics Handling Convenience Package Size


Package Material: Changing Trend – From Wood to Paper Metal Container are more popular Plastics Innovation in packaging Tetra packs/Aseptic Packaging: It is used for

food packaging. It is sterilized and easy to handle. The package consists of several thin layers of polyethylene foul and paper. It has a good shelf life. Exp-Fruit Juice, Oil etc.

Package Aesthetic: It is used for enhancing the sales appeal of the product. It include package material, package size and shape etc.


Handling Convenience: In many cases it functions as a useful differentiator. The various attributes of the packaging material, design, shape, size, shape etc together should make the handling and use the product convenient for the customers. Example: Ponds cold cream in tubes Application convenience of Harpic The Bee Can

The Package Size: Economy Pack/Family Pack- It makes the product

available in larger size. Households with larger family size buy economic packs and avoid the inconvenience of repeat purchase

Refill pack: Reusable Container Exp. Horlicks in Bottle, Amul in Tin

Container, Nescafe in Glass Bottle container The Sachet SweepProf. Suvendu Kr. Pratihari 27

Managing Brand and Brand Equity


Role and Significance of Brand

Definition of Brand: It is a name, term &/or symbol to identify the goods and services of one seller from the offers of other competitors.

It is a Asset of the Firm Brand Represents the value delivered

to customers. Brand offers strategic move to the firm.


Categorization of Brands Based on Types of Value they Offer Functional Brand

Emphasize the functional value of their offer.

Exp: Nano Car, Maruti 800, Hero Honda for Mileage

Image Brand They offer image value to the user. Exp-Parker, Mercedes car, Parkavenue

Experience Brand These offer unique experience the user

gets by interacting with the brands. Exp-Kingfisher, Thomas Cook, ICICI etc.


Brand Strategies In developing the brand Strategies, an

organization can pursue one of four approaches: Corporate umbrella Branding

Exp: Kellogg's, Cadbury's, Amul’s etc. Family Umbrella Branding

Exp: ITC, reliance, Range Branding

Exp: Lifebouy Soap & Liquid Individual Branding

Marie Gold Biscuits


Product Life Cycle


Market Pioneering Stage

Sales are Low Profit is either negative or negligible. Demand has to create and developed / High

investment in Consumer awareness and Promotion.

Customers have to be prompted to try out the product.

Success of this stage depends on Nature of the product Its Price Technological Newness Consumers’ view of this product

Price Strategy : Market Skimming / Market Penetration


Market Growth Stage Demand increases Size of the market grows Sales and Profit go up Competitor may enter with similar or slightly

improves version of the product. The company need to make its product distinct

and different in the eyes of the consumer and stay ahead of his competitors.

Incremental product improvement based on market feedback and competitor product is needed.

Price shifting may be worked out with respect to the competition

Marketing and distribution efficiency now become an important factor.


Market Maturity Stage

Relatively low price, increased marketing cost, keener competition, less profits.

Demand tends to reach at a saturation point

Enough supply from the competition sources

Marketing trade/channel may become more powerful in this stage and they become multi branded now.

More product differentiation and Building brand loyalty is required.

Sales and Trade promotional initiatives may be worked out for maintaining the sales volume.


Market Decline Stage

Sales begin to fall and Demand shrinks – due to the new and functionally improves products availability.

Price and margin get decreased resulting decrease in total sales and profit.

Some company starts linking these declining products with other premium products they have developed to stretch the life of the declining products.



Thank You

Prof. Suvendu Kr. [email protected]

mailto:[email protected]

Shaping the Market Offerings

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